Lewis Black, CEO of Almonty Industries
China produces 80% of the U.S. rare earths and has been doing so for quite some time. What makes things even worse is that over the past 12 to 18 months, a global pandemic has had a serious effect on the supply chain. People around the world rely on these rare materials in their everyday lives, and many consumers stuck at home decided that their current cell phone or computer needed to be replaced. This ultimately caused a shortage of these materials affecting various other sectors including the automotive and electronic industries.
Diversifying the supply chain would lead to the production of at least 17 minerals indispensable to manufacturing both consumer and government necessities would not be solely sourced from China. However, this expansion won’t happen overnight. The actions needed to be taken to fully diversify the supply chain is several years away due to the planning, process and permitting it takes to both open a mine and subsequently build a factory.
Production of Rare Earths in New Locations Will Expand the Global Supply Chain
New arrivals to the market have begun mining projects throughout the world that are mining for tungsten, a rare earth particularly important for items used in everyday life. This is significantly important as China has restricted the amount of tungsten exports that can be shipped to the U.S. - causing a great deal of concern regarding the overall supply chain of the material.
Tungsten is used in various different applications including the construction and content of both semiconductors and anodes. It’s also used in products varying from the filament of light bulbs, electric furnaces, and X-rays for medical and industrial imaging, to lead-free fishing weights and golf clubs, and drill bits and saw blades. Tungsten is also used to produce glass syringes – a product that has become very high in demand during a global pandemic that still relies on the worldwide distribution of vaccines.
For all the aforementioned reasons and more, it’s imperative to diversify the supply chain for rare earth materials like tungsten. New mining projects throughout the world will increase supply levels as well as exports back to or within the U.S., which also benefits the overall supply chain of tungsten for production and manufacturing.
This is currently a mining project in South Korea is of particular significance. The Korea Tungsten project in the Sangdong Mine hosts one of the largest tungsten resources in the world. This mine was the leading global tungsten provider for more than 40 years and has the potential to produce 50% of the world’s tungsten supply. Currently, this project is increasingly becoming the center of focus for resource experts, miners, and investors around the world.
What the Future Holds for the U.S.
President Biden has just worked to pass a significant infrastructure plan that is also meant to serve as 50% cut in emissions by 2030. The current infrastructure proposal includes a $7.5 billion investment to create electric vehicle charging stations. Other roadway enhancements are included in the plan as well. Originally, there was discussion about tax incentives for electronic vehicle battery makers for building factories in the U.S. that would create new manufacturing jobs. However, 70% of the world’s EV batteries are still currently built in China because that’s where most of the materials used to build them are located.5 Until the new rare earth production players are up-and-running in mining and manufacturing, there remains an immediate issue for employees working in the coal mining and traditional auto manufacturing industries. The question remains: how will these workers pivot their careers to the clean energy sector that is to come in the U.S.
As China continues to dominate a majority of rare earth mining and manufacturing, the future of mining and manufacturing rare earths remains to be seen in the U.S. China's hold over rare earth mining and manufacturing didn’t happen overnight. For almost 30 years, China has been building a strong supply chain while also re-evaluating it every one to five years. With export restrictions to the U.S. now hindering the demand of popular consumer goods and materials, it’s important for the U.S. and other countries to both strategize and diversify their own supply sources. While this is of utmost importance, it will still take time to make the change.